994 F.3d 664
D.C. Cir.2021Background
- Penn Traffic filed bankruptcy in May 2003; the employee (Fisher) resigned in Aug. 2003 and elected a lump-sum pension payment under the Plan.
- Penn Traffic’s board voted to terminate the Plan in Sept. 2003; the Plan denied Fisher’s lump-sum request in Oct. 2003; the Plan served a NOIT in Nov. 2003 and PBGC became trustee in Feb. 2005.
- PBGC issued a benefit determination in Dec. 2009 treating Fisher’s benefit as a monthly annuity; Fisher appealed and the PBGC Appeals Board denied relief in Sept. 2011 relying on PBGC Policy 5.4-9.
- The D.D.C. vacated the 2011 decision and remanded for PBGC to justify how Policy 5.4-9 aligns with ERISA and to address 29 C.F.R. § 4044.4.
- On remand (2016) PBGC issued a new final decision denying Fisher’s lump-sum request based on 29 C.F.R. § 4044.4(b) (prohibiting certain pre-termination distributions “in anticipation of plan termination”); the district court granted summary judgment to PBGC and the D.C. Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PBGC’s 2016 reliance on §4044.4(b) was an impermissible post-hoc rationalization after remand | The district court should not have remanded; PBGC’s 2016 rationale is a new reason not permitted on remand | PBGC’s 2016 decision was a new agency action taken "afresh" after remand and procedurally permissible | Held: PBGC’s 2016 decision was new agency action; use of §4044.4(b) is reviewable and not a forbidden post-hoc rationale |
| Whether §4044.4(b) is ultra vires because ERISA §1341(c) bars only post‑NOIT lump-sum restrictions | Fisher: §1341(c) expressly limits post‑NOIT restrictions, so PBGC cannot restrict pre‑NOIT lump sums | PBGC: ERISA is silent about pre‑NOIT distributions and §4044.4(b) is a permissible regulatory exercise to prevent abuse | Held: Chevron step one — statute is not clear; §4044.4(b) is not precluded by ERISA |
| If ambiguous, whether §4044.4(b) is a permissible construction of ERISA | Fisher offered no persuasive contrary construction | PBGC: regulation advances ERISA’s purpose by preventing improper pre‑termination distributions | Held: Chevron step two — §4044.4(b) is a reasonable, permissible construction and survives deferential review |
| Whether PBGC arbitrarily or capriciously applied §4044.4(b) to Fisher’s request | Fisher: PBGC misapplied the §4044.4(b) factors (funding change, past practice, plan consistency) | PBGC: record shows deteriorating funding, Fisher’s unique benefit increase, and other circumstances supporting anticipation of termination | Held: Arbitrary-and-capricious review — PBGC reasonably applied §4044.4(b); denial upheld |
Key Cases Cited
- PBGC v. R.A. Gray & Co., 467 U.S. 717 (1984) (describing Title IV ERISA purpose and PBGC role)
- Nachman Corp. v. PBGC, 446 U.S. 359 (1980) (context for ERISA protections on plan termination)
- PBGC v. LTV Corp., 496 U.S. 633 (1990) (distress termination procedures and PBGC trusteeship)
- Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984) (administrative deference framework)
- Fla. Power & Light Co. v. Lorion, 470 U.S. 729 (1985) (remand to agency when record is inadequate)
- SEC v. Chenery Corp., 332 U.S. 194 (1947) (agency may adopt new reasons when taking new action)
- Dep’t of Homeland Sec. v. Regents of the Univ. of California, 140 S. Ct. 1891 (2020) (distinguishing elaboration on prior reasoning from new agency action)
- Davis v. PBGC, 734 F.3d 1161 (D.C. Cir. 2013) (PBGC duties as trustee and benefit determinations)
- Vill. of Barrington v. Surface Transp. Bd., 636 F.3d 650 (D.C. Cir. 2011) (deferential review standard for agency interpretations)